For many years businesses have rightly been focused on identifying energy efficiencies to reduce their energy bills and cut carbon emissions.
But changes in our energy markets mean businesses can not only save money from cutting their energy use, but also earn money from getting smarter with the energy they do use. In June 2015 National Grid announced it wants to grow the amount of Demand Response from the 700MW it currently buys to 3GW by 2020, equating to a spend of around £400 million each year.
That £400 million is being transferred from peaking power stations to businesses, in an effort to make our demand for energy more responsive. It’s a vital part of National Grid’s strategy to integrate larger amounts of renewable energy and support the UK’s transition to a low carbon economy. Effectively it is turning the system on its head, so instead of adjusting supply to meet demand, our demand adjusts intelligently to meet supply. This means using more energy when the wind blows or the sun shines, and reducing consumption when supply falls, without any impact on business operations.
It will help to make the whole system cleaner, cheaper, more secure and more efficient. For businesses, it’s an opportunity to reduce their energy use, generate a new income stream and move beyond their own footprint to help decarbonise our energy system.
So how does it work?
Demand Response can take a variety of different forms, from equipment adjusting its energy use in real-time to help manage second by second fluctuations in electricity supply and demand, to slower “reserve” options, such as switching on back-up generators when a power stations goes offline, or peak price avoidance strategies, such as Triad Management.
In the past many businesses have considered Demand Response too disruptive but advances in technology have led to “invisible” solutions which can provide a long-term revenue stream without any impact on operational processes.
A high value, no impact approach
This high value, no impact form of Demand Response is called Dynamic Firm Frequency Response, or Dynamic FFR. It helps National Grid to balance electricity supply and demand in real-time and turns energy-intensive equipment into “smart devices” which can adjust their electricity consumption within seconds to help maintain our power supplies. This front-line service is the highest value form of Demand Response and energy users are paid for the availability of their equipment 24/7, 365 days a year.
It’s a very sophisticated approach to managing energy demand which to date has only been available via Open Energi’s Dynamic Demand platform. Because the service only responds for a few minutes at a time and is governed by the equipment’s control parameters it can operate invisibly without any impact on operational processes or business performance. Dynamic Demand simply “talks” to the asset in question and asks if it can temporarily increase or decrease its energy consumption without affecting its primary function. If it can it will and if it can’t it won’t. Businesses can expect to generate revenues equivalent to 5-10% of their energy bill.
Building a virtual power station
Water company United Utilities has embraced Demand Response and by 2020 it expects to have around 50MW of flexible capacity to offer up to National Grid – the equivalent of a conventional peaking power station. This will reduce carbon emissions by around 100,000 tonnes per year and should generate income of around £5m, which will be reinvested into site assets to reduce operating costs.
It’s all part of a strategy to get smarter with energy use, as Andy Pennick, Energy Manager explains: “We know that energy is one of our biggest costs so our mantra is to use less, generate more and use our assets smarter. We’ve done a lot of work already on installing more energy-efficient equipment and we’re generating some 18 per cent of our own electricity through biogas and other renewable sources. But it was the “getting smarter” that led us to trialling Dynamic Demand.”
The technology was trialed at three sites in early 2014 – wastewater treatment plants at Bolton and Birkenhead and a water pumping station at Hoghton near Blackburn.
The results were so successful the company is now rolling out the programme across the whole North West region. To date it has installed the technology at 10 of its larger activated sludge plants (those with assets which consume at least 100kW), including Davyhulme in Manchester, St Helens, Preston, Runcorn, Warrington and Widnes. Over the coming months it is targeting a further 10 activated sludge plants and has started to evaluate new processes that it feels would work with the technology.
Andy added: “In effect, we’ve become like a virtual power station. When everyone gets up after watching the Great British Bake Off to switch the kettle on, some of our pumps go off automatically to free up the power. That might only be for a few minutes, then they can restart again. We have a lot of tanks and water storage within our processes, so we can be flexible about precisely when we use our pumps. The lower operating costs are good news for our customers.”
